![Go to the O: drive and in the “BINET” folder find assignment #1. Open it, and immediately “SAVE AS” on to your “U” drive. Go ahead and complete (individually) the assignment. Take your time and go over it slowly, this is a basis for the rest of the course! Login to your email ( https://exchange.nbss.nbed.nb.ca ). When you are finished, submit the assignment to me via e-mail ( [email_address] ) with the subject “Unit 2, Assignment 1”. Accounting Equation Assignment](https://image.slidesharecdn.com/acct120-class8-thebalancesheet-100215075242-phpapp01/85/Acct120-Class-8-The-Balance-Sheet-13-320.jpg)
Acct120 Class #8 The Balance Sheet
- 1. Introduction to Accounting 120 Mr. Binet / Moncton High School Class #8: The Balance Sheet
- 2. You will be introduced the marvel that is… The Balance Sheet! We will have a chance to examine what is your “networth”. We will have some practice with identifying what liabilities and assets are in an assignment. In Today’s Class…
- 3. Financial position is the monetary value of an individual or company. To determine the financial position of a company or an individual, simply: Determine Assets: Assets are things that are owned and have value. An example of an asset is: Computer $3 500.00. Determine Liabilities: Liabilities are debts, also known as, claims against the assets. An example of a liability is: Bank Loan $1 500.00. Determine Owner's Equity: Determine the difference between the total assets and total liabilities. Owner's Equity is also referred to as Capital, Equity or Net Worth. Financial Position
- 4. Can you determine what an asset is compared to a liability ? Cash Bicycle Mortgage House Bank Loan Stereo IOU to Friend Financial Position
- 5. Total assets minus total liabilities equal owner's equity. This relationship is known as the Fundamental Accounting Equation: A - L = OE Assets - Liabilities = Owner's Equity The equation may also be stated as: A = L + OE Assets = Liabilities + Owner's Equity The fundamental accounting equation is the basis of accounting theory. The Fundamental Accounting Equation
- 7. Using the fundamental accounting equation, let's determine the financial position of Samantha Palmer, a student. The following is a list of her assets and liabilities. Step One: List and total assets: Samantha’s Financial Position
- 8. Step Two: List Liabilities Step Three: Using the Fundamental Accounting Equation to determine Net Worth (A – L = OE)… Samantha’s Financial Position
- 9. Samantha's owner's equity or net worth is $4 738.00 . Samantha’s Financial Position
- 10. The total monetary value of assets and the total monetary value of liabilities change on a daily basis. This has a direct effect on the monetary value of the owner's equity. The fundamental accounting equation allows us to analyze these changes. Review the following example, demonstrating changes: Suppose the fundamental accounting equation is: Assets ($80 000) - Liabilities ($25 000) = Owner's Equity ($55 000) Changes to the Fundamental Accounting Equation
- 11. Now assume assets increased by $10 000 and liabilities decreased by $2 000. What happens to the financial position? Assets ($80 000+$10 000) - Liabilities ($25 000 - $2 000) = Owner's Equity (?) Assets ($90 000) - Liabilities ($23 000) = Owner's Equity ($67 000) Now assume assets increased by $8 000 and owner's equity decreased by $5 000. What happens to the financial position? Assets ($90 000 + $8 000) - Liabilities (?) = Owner's Equity ($67 000 - $5 000) Assets ($98 000) - Liabilities ($36 000) = Owner's Equity ($62 000) Changes to the Fundamental Accounting Equation
- 12. Now assume assets increased by $10 000 and liabilities decreased by $2 000. What happens to the financial position? Assets ($80 000+$10 000) - Liabilities ($25 000 - $2 000) = Owner's Equity (?) Assets ($90 000) - Liabilities ($23 000) = Owner's Equity ($67 000) Now assume assets increased by $8 000 and owner's equity decreased by $5 000. What happens to the financial position? Assets ($90 000 + $8 000) - Liabilities (?) = Owner's Equity ($67 000 - $5 000) Assets ($98 000) - Liabilities ($36 000) = Owner's Equity ($62 000) Changes to the Fundamental Accounting Equation
- 13. Go to the O: drive and in the “BINET” folder find assignment #1. Open it, and immediately “SAVE AS” on to your “U” drive. Go ahead and complete (individually) the assignment. Take your time and go over it slowly, this is a basis for the rest of the course! Login to your email ( https://exchange.nbss.nbed.nb.ca ). When you are finished, submit the assignment to me via e-mail ( [email_address] ) with the subject “Unit 2, Assignment 1”. Accounting Equation Assignment